Calculate the compound interest on Rs. 18000 in 3 years, when the rates of interest for successive years are 6%, 12% and 18%.

Amount = P( 1 + r / 100) n

Where, P is the principal, n is the time period and r is the rate of interest

In the first year,

Principal, P = 18000

Rate of interest, r = 6%

Time, t = 1 year

∴ Total amount after 1 year including interest = 18000(1 + 6 / 100) 1

= 18000 × 1.06 = 19080

In the second year,

Principal, P = 19080

Rate of interest, r = 12%

Time, t = 1 year

∴ Total amount after 1 year including interest = 19080(1 + 12 / 100) 1

= 19080 × 1.12 = 21369.6

In the third year,

Principal, P = 21369.6

Rate of interest, r = 18%

Time, t = 1 year

∴ Total amount after 1 year including interest = 21369.6(1 + 18 / 100) 1

= 21369.6 × 1.18

= 25216.128

∴ Total interest = 25216.128 – 18000 = 7216.128